Why Does El Paso Only Have One Electric Provider?

Today’s topic comes directly from a listener/caller.

“I had a question about this whole rate increase from the Electric Company…How can we, as a community, get a new electric company in to compete with the one we have currently? Is that even possible?”

A very good question, that deserves a thoughtful answer. It COULD be done. Here are a few key things to know about first.

ENERY REGULATED OR ENERGY DEREGULATED

Every city and town in Texas is either energy-regulated, meaning only one electric company, OR energy-deregulated, where multiple companies could compete for business. 85% of cities in Texas are energy-deregulated.   El Paso falls into the energy-regulated category.

In 2002, the State of Texas de-regulated the electricity sales market.  That effectively ended the energy monopoly of public utility companies.  Energy de-regulated cities include Dallas/Ft. Worth  and Houston (the two largest cities).  El Paso, Austin and San Antonio are all REGULATED cities.

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In de-regulated cities, the government encourages competition between electricity providers.  In regulated cities, like El Paso, local government or a regulatory body sets the rules for energy supply, distribution and pricing.

EL PASO’S CURRENT STATUS

El Paso Electric is a publicly-owned (this will be important later) company that is responsible for generating and delivering power.

HOW DO WE BECOME DE-REGULATED

It gets tricky here. To become a de-regulated market, the city would have to advocate for legislative changes that would welcome competition into the energy market.  Advocacy for a de-regulated market would have to come from local leaders (city council, mayor, city manager, etc.) But, you never hear anybody running for elected office on a “pro-deregulation” platform. Perhaps, if there were a big push for this, elected leaders MIGHT start advocating for it.

FINAL ANALYSIS

I’m a believer in Capitalism and Capitalism doesn’t work without competition. However, many observers say that under deregulation, the government has effectively “taken over” from the energy companies by the government.  In 2023 the Texas Supreme Court said, in a majority position that ERCOT (the Energy Reliability Council of Texas) is “an arm of the government”.

Speaking of ERCOT, they operate the electric grid for about 90% of the state’s population.  In 2021, a severe winter storm caused widespread power outages and resulted in 246 deaths.  El Paso’s power didn’t go out because…we don’t use ERCOT.

Let’s think this through thoroughly before we actually do anything. Not all of us can afford to fly to Cancun if the grid goes down.